Seattle Wants to Impose Minimum Wage & New Taxes on Popular Ridesharing Apps
Amidst regulation updates in California that could hurt their businesses, popular ridesharing apps Uber and Lyft are now feeling the pressure from Seattle, as Mayor Jenny Durkan announced that the city plans to implement minimum wage requirements and impose new taxes on the apps. The end goal is two-pronged: 1) to protect independent contractors employed by Uber and Lyft, and 2) to generate additional revenue for affordable housing. Durkan’s office also indicates plans to include paid time off, unemployment insurance, and other benefits to drivers.
Uber and Lyft have raised appreciation for the goal to raise funds for affordable housing, but have proposed that the city consider congestion pricing, which tolls cars driving through the urban core during peak hours. As Nathan Hambley, a spokesperson for Uber, tells GeekWire, “We would have concerns with any proposal that raises prices for riders and decreases tips for drivers. We support the creation of a guaranteed minimum earnings standard for drivers, and we believe that any ride-hail proposals should be developed based on broad input from the entire driver community in Seattle.”
New York was the first state to enforce a minimum hourly rate (of $17.22) but Reuters has reported that drivers are often locked out of the app when there is low demand.
Both Uber and Lyft went public this year, and each suffered losses amidst growing concerns about the ridesharing business model and regulatory concerns that are arising at the state-level. California pushed hard on the companies again recently, by approving a bill that makes it more difficult for drivers to qualify as independent contractors, but the companies are fighting the legislation. In the meantime, Mayor Jenny Durkan and the city of Seattle are watching closely.